Trade negotiations between the U.S. and China unraveled after Trump’s announcement of a “green channel” for rare earths

The agreement had been shaken by a series of disputes, which led to a phone call between President Trump and China’s leader in an effort to calm the waters.

Analysts say there may be some progress on the matter this week, after President Trump said last week that China’s leader had agreed to restart the flow of rare earths.

In response, U.S. officials have tried to squeeze China by clamping down on exports to the country, including software for making semiconductors, gases like ethane and butane, and nuclear and aerospace components, people familiar with the bans said. The U.S. government wanted to impose bans on Chinese students in the United States before the president spoke with his Chinese counterpart.

On the call, Mr. Xi warned that the leaders of the United States and China needed to “steer clear of various disturbances or even sabotage,” seemingly a reference to the idea that critics of China in Mr. Trump’s government had driven some of these efforts without his knowledge. One person familiar with the efforts said that the actions were done with the knowledge or direction of Mr. Trump.

Talks continued into a second day Tuesday, with three of Trump’s top aides attending. Commerce Secretary Howard Lutnick, Trade Secretary Scott Bessent and Trade Representative Jamieson Greer are in London, with Chinese vice premier and lead economic representative He Lifeng representing Beijing.

LONDON — The U.S. and China have agreed in principle on a framework to carry out an agreement they reached on resolving their trade disputes last month, Chinese state media said.

In an effort to build on the agreement of a 90-day suspension of most of the tariffs they had imposed on each other in a trade war, the two sides held more talks last week.

The US and China have clashed over a number of issues since the talks took place, including visas for Chinese students at American universities and rare earth minerals.

President Trump told reporters at the White House on Monday that he was getting “good reports” from the talks. “We’re doing well with China. “China is not easy,” Trump said.

But while China has said it would be willing to set up an expedited “green channel” for companies needing rare earths, it has also signaled it will not completely ease its powerful grip on the world’s supply of refined rare earth products, saying its export controls are “driven by its domestic industrial sustainable development needs,” according to a commentary published this week by the country’s state news agency.

The U.K. government is giving the venue for the U.S.-China talks but isn’t involved in them. “We are a nation that champions free trade and have always been clear that a trade war is in nobody’s interests, so we welcome these talks,” it said in a statement.

China’s commerce minister talked to Britain’s business secretary during a meeting in London. A statement from China’s commerce ministry said Wang called for both countries to uphold the multilateral trading system, and he wanted to see greater cooperation between China and Britain on finance and sustainability.

Overall, U.S. tariffs on goods from China still remain higher than those imposed on other countries. The U.S. cut its base tariffs on goods from China to 30%, while China cut tariffs to 10%.

The U.S.-China trade war is still in the water: Implications for the United States and for the world’s largest economies

Relations between the two countries have deteriorated since a tentative truce in Geneva, with both accusing others of violating the agreement.

We shouldn’t hold our breath for any meaningful progress following the talks, warns Yu Jie, a senior research fellow at London’s Chatham House. The trade negotiations between Beijing and the US are deep in the water. China knows how important the rare earth export controls are. On the other hand, the U.S. really wants to slow down China’s technology progress.”

Some of the thornier points of contention between the two sides will have to be discussed over the next few days. Lutnick said Tuesday he expects the talks to go on “all day.” He told reporters the talks were “going well” and “we’re spending lots of time together.” The Chinese delegation is in London all week and talks could go on beyond Tuesday.

The second round of tariffs negotiations between the US and China will take place in Lancaster House, a mansion in the U.K. Investors and world leaders are watching these talks closely to see if they can help thwart the prospect of a deepening trade war between the world’s two biggest economies.